Winnipeg Construction VIII

[steveosnyder]

Originally Posted by bomberjet

Thanks for all the info everyone. I'll take a read through the articles.

I see all the points everyone's making about the BRT and surrounding TOD being incestuous. And I don't disagree with that. But I don't fully agree either. Stantec has nothing to do with BRT, so they're out. Is Stevenson involved with the Transitway at all? I didn't think so. Dillon and McGowan Russell, okay.

Stevenson Advisory and Dillon submitted the final report to Transit. They did most of the projections on tax incremental gains. http://winnipegtransit.com/assets/932/Final_Report_-_SWRTC_Stage_2_Alignment_Options-web.pdf

As for the rest, I am not an engineer or transportation planner -- but I stand by the fact that it should be an unbias source to determine the alignment, not someone who stands to gain a lot.

[Simplicity]

Originally Posted by bomberjet

Why is it such an issue that the City is trying to develop vacant lands into taxable, income making properties.

Interesting question here. This sort of goes to the point about all development being good development if one is so inclined to believe that. I wouldn't classify unserviced land the sort of infill development we're looking for. The point is to increase the denominator of livable properties on existing infrastructure; not to increase the numerator and hope the denominator falls in line; that's been the unworkable practice up 'til now. So we're losing sight of the original intent if that was ever truly the intent at all. One could just as easily say that North Point Village will contribute to the inventory of taxable lands, but that argument never tells the full story.

I see your point about the consultants being a little bit of a stretch. Since we don't know who will be involved, it's difficult to say, but there's been a fairly consistent register up until now and it wouldn't be out of line to suggest those same few parties have all the incentive in the world to continue creating work for themselves. Naturally, that's what they're in business to do. But it's not unexpected that the city starts picking up indirect development costs. Why the need to push a TDA if things are as simple as developers developing land they already own? If the city wants some control, why not just enact a PDO and be done with it? I just don't think everybody is fully aware of where the costs to the city are going to come from quite yet because nobody has even seen a plan for this future development. I assume mostly because Marquess has 900 units in the Fort Rouge Yards to unload before he could even consider moving on. That isn't the sort of apparent risk that justifies massive public investment while the horse is at least still running ahead of the cart.

Pembina is just the right sort of commercial corridor that can grow around a transit line. It's already mostly zoned in a way that would only require conditional use to build mixed-use and the infrastructure has already been laid. It just seems like people are trying to confound the process in order to justify their preference which is that a nice little mini-precinct in a swamp means more business, 4 grade separations means more business, and a developer who was given land in an otherwise undesirable area now has a dedicated transit line.

The other stuff coming from Russ Wyatt about full cloverleafs and newly serviced Shindico lands notwithstanding ('cause who ever knows with Russ), this already seems counterintuitive to the city's objectives. That fact that's it's become an incestuous little circle-jerk only serves to fortify the idea...

[Simplicity]

Originally Posted by steveosnyder

Stevenson Advisory and Dillon submitted the final report to Transit. They did most of the projections on tax incremental gains.

Hoo boy. The push for a TDA and a report on tax incremental gains? The costs the citizens are only just beginning.

I'll bet the name of the program is something like 'Transit Oriented Development Residential Grant Program'...

[trueviking]

Originally Posted by Simplicity

A couple weeks ago you wrote with certitude that nothing is built at $150/sq ft. You backed up that assertion by suggesting that almost nothing is constructed at twice that. If that's your input, you're far better off on the sidelines.

Ha ha. Gladly.

I in no way support the civic government and its actions...no idea where you got that from.

No question the behaviour of developers and politicians is reprehensible, there is more to come regarding this that will make you go ballistic, but it does not make me stop believing in rapid transit as a good investment to create targeted higher density infill growth....i get that the whole thing stinks and that is enough to turn many against the whole thing, but in the big picture it is beneficial to the city's urban form.....my far bigger complaint is the city is allowing bad TOD.

I think you are making too much out of the Parker dogleg....the line still runs behind pembina for much of its length....I'm not sure that where it is located it would spur much new residential development along Pembina, especially with the conditions that Pembina offers.....but that is another debate....the whole thing smells, no question about it but, removing all the friends and handshakes, and looking at the development as a whole, i still support it and the investment. The chances are much greater that the investment will be recouped than most others we are paying for.

You confuse a slowing in multi-family development as stopping....it will continue to be built and the city should use rapid transit as a way to target it...

fort rouge has major investors.

Other than the four major developments happening, two other pieces of land have been purchased recently for TOD.


we were discussing the relative cost of a public building...you can build for $3psf if you use cardboard...i stand by the fact that what we were discussing was very good value for money....it appears well beyond lowest common denominator development....that was the point of the discussion, not how absolutely cheaply can one build.

Right about Schadenfreude....as soon as i typed I knew, but i got sidetracked....my mistake....

i dont mind when the other side of a debate turns to off topic insults...resorting to that is a sign that the debate has been won.


for the record: almost 250 days per year go above freezing on average....only 2 days in the last decade have been -40C.

[1ajs]

yo vike did ur cost include land?

[trueviking]

Originally Posted by steveosnyder

To this, I would like to point to a graph from a group I think everyone here should be reading.



While he's talking about automobile investment the same could be said about any investment, including TOD. What's the point of Public investment leading private investment -- other than to make a few land-owners even more wealthy?

So, who should make money then? It's going to be private land owners whether its a single family subdivision or a TOD. Cities have to facilitate growth and someone has to build that growth. You would prefer the city said no more infrastructure, good luck to you?

Transit is a better investment for facilitating growth than Waverly West flyovers because it targets infill and is higher density. The hope is that the money is returned through elevating the value of the adjacent land and sparking tax paying development that is more sustainable to maintain long term.

The whole point of TOD is to make your chart more balanced. It is correct for car development. That's why we need to build smarter, which TOD done right should be.

Your chart needs units. Not all public investment is the same. Build denser infill and your chart is completely different. And that's the whole point.

[steveosnyder]

Originally Posted by trueviking

So, who should make money then? It's going to be private land owners whether its a single family subdivision or a TOD. Cities have to facilitate growth and someone has to build that growth. You would prefer the city said no more infrastructure, good luck to you?

Transit is a better investment for facilitating growth than Waverly West flyovers because it targets infill and is higher density. The hope is that the money is returned through elevating the value of the adjacent land and sparking tax paying development that is more sustainable to maintain long term.

The whole point of TOD is to make your chart more balanced. It is correct for car development. That's why we need to build smarter, which TOD done right should be.

Your chart needs units. Not all public investment is the same. Build denser infill and your chart is completely different. And that's the whole point.

I agree -- Rapid Transit and TOD is a much better use of the public investment as it increases the private investment afterwards. But the City is still running the risk. They have all this upfront costs with a lot of risk. (never mind the fact that many of the developments get subsidized further)

When the City fronts all the risk by expanding services like this, they will eventually lose when the market ebbs. When this happens we have an over-built, bloated transit system (or water/waste water system, or a school with no kids, etc.).

When the City builds this infrastructure in an area that is already well established, and already has a tax base, they eliminate these risks, because the base to pay for the infrastructure is already there. They just promote intensification along the corridor, which is also a good thing.

They plan to use TIFs to finance the project, but what if (and I'm not saying this is likely as I am no economist) as Simplicity says, we have an ebb in the housing market? We are trapped with a RT corridor that hasn't created a tax base to pay for itself. We have a long-term debt on something that gives us little to no return.

Also, I linked to the whole series of posts from Chuck Marohn from Strong Towns, but here it is again.

http://www.strongtowns.org/journal/2014/3/26/day-6-a-world-class-transportation-system.html

[Bdog]

Originally Posted by steveosnyder

They plan to use TIFs to finance the project, but what if (and I'm not saying this is likely as I am no economist) as Simplicity says, we have an ebb in the housing market? We are trapped with a RT corridor that hasn't created a tax base to pay for itself. We have a long-term debt on something that gives us little to no return.

You're not an economist? Sure could have fooled me with the way you write some of your posts

But in all seriousness, this is a regional infrastructure project. It moves people across across a vast swath of this city, between two of the biggest employment centres in the City and everywhere in between.

While the infill projects are great, I don't remember hearing anywhere that they are the sole justification for the southwest corridor. Where is this "tax-base supporting itself" angle coming from? I don't think it was used at all to sell this project. It's almost as if you're implying that if the 1000 or so units in the Parker Lands can somehow pay for this project, or make it feasible. What about the probably 10,000 units and tax base that already adjacent to the corridor?

[Simplicity]

Originally Posted by Bdog

You're not an economist? Sure could have fooled me with the way you write some of your posts

But in all seriousness, this is a regional infrastructure project. It moves people across across a vast swath of this city, between two of the biggest employment centres in the City and everywhere in between.

While the infill projects are great, I don't remember hearing anywhere that they are the sole justification for the southwest corridor. Where is this "tax-base supporting itself" angle coming from? I don't think it was used at all to sell this project. It's almost as if you're implying that if the 1000 or so units in the Parker Lands can somehow pay for this project, or make it feasible. What about the probably 10,000 units and tax base that already adjacent to the corridor?

Steveo posted a link to the Stevenson Advisor/Dillon Consulting final report to council earlier in the thread and the entire contribution from Stevenson Advisors was that TIF was going to underwrite the second phase in the 'dogleg' configuration and that's why it's the superior model. They're trying to rationalize the otherwise confounding route by suggesting there's more economic opportunity inherent within it. Which is true. If you're Stevenson Advisors and Dillon Consulting.

[biguc]

This thread has turned really, really good. What a fantastic conversation. This is exactly what this place needed.

Snyder and Simplicity, do you two read market urbanism?

[steveosnyder]

Originally Posted by trueviking

It's going to be private land owners whether its a single family subdivision or a TOD. Cities have to facilitate growth and someone has to build that growth. You would prefer the city said no more infrastructure, good luck to you?

I just wanted to add something to this mentality, and again let me preface that I want Rapid Transit as much as anyone here.

Doing the Parker Dogleg makes an already rich person richer by helping him (them) with their development potential for their large swaths of land. Doing the Letillier line helps a lot of private individuals get a little more wealthy. They have already taken on the risk of building, we should build infrastructure to service them.

I can't even begin to estimate the number of parcels along Pembina, but if all those people see a real increase in value of their properties as a result of RT I think that would be better than one (or maybe a few) person bearing the fruit of the RT potential.

[Simplicity]

Originally Posted by biguc

This thread has turned really, really good. What a fantastic conversation. This is exactly what this place needed.

Snyder and Simplicity, do you two read market urbanism?

Nah, never heard of it.

[Simplicity]

Originally Posted by trueviking

Build denser infill and your chart is completely different. And that's the whole point.

You're right, that is that point. The difference is that you're suggesting we continue taking the highest risk in exchange for the highest reward, whereas I'm continuously saying Winnipeg isn't a city where you can afford to do that.

You're completely disregarding the economic issues prevalent here. It's not enough to just say 'well, build the stuff and it'll serve future demand - whenever that comes - because it's coming and we need to be prepared'. This is a violation of extremely important axioms of economics, not the least of which is the concept of supply and demand which I don't need to get into here.

For whatever reason, you don't take a housing slowdown as something that should be heeded. You're content to continue building and building as if the RT line's real estate exists in a vacuum and has no broader effect on the market at large and vice versa. Your thinking will have Winnipeg in a deflationary spiral. As inventories increase, prices decrease. Why? Because people have options. Options are expensive things to keep in markets. The Winnipeg housing market already exists on razor thin margins - especially the multi-family market. Any oversupply at all will cause those margins to disappear. And not just because you have hard-assed clients that are going to grind the developer on the price (though that will assuredly happen), the interest, insurance, taxes, and condo fee expenses associated with holding unsold units pile up very quickly and they'll erode your margin faster than some slick talking realtor representing a purchaser ever will. This becomes insidious because, as I had mentioned earlier in the thread, the city's property tax system works on the basis of market valuation lagging two years. If we're oversupplied because we're trying to engineer demand the market tells us doesn't exist, we'll have a rapid transit line in a field of either unsold or unconstructed units on land we've already serviced that isn't producing tax revenue at nearly the rate it was projected to. This isn't a trivial matter in your argument above - you're suggesting that the line representing infrastructure (public investment) lines up closer to private investment the denser we go. That's a true point, but only if today's values increase in perpetuity (Stevenson is using a growth rate so they're not expecting any decrease or even a stabilizing of property values), and we're actually able to occupy all the units that are projected to be built. Something that's probably unlikely considering every developer knows you never achieve maximum density.

None of this makes mention of the effects of pulling demand forward. We have a relatively stable unemployment rate around here - though it's moving up slightly. 12% of our economy is construction. Just plain construction. That does not include construction related. Construction related is probably closer to 20-25% which is how the US lines up. Since you're an architect, you'd be construction related. I'm construction related. Every engineer who isn't under the desk of a few city bureaucrats is constructed related. If we start stuffing supply channels because we're short-sighted about the benefits of development, we'll all be out of work. It'll be like the 90s all over again. And those immigrants we're expecting to fill the void? They won't be interested in coming to an economy that is already lagging the rest of the country with only 2% Y/Y growth.

The point about the Lettellier configuration is that it just simply doesn't matter how the city ends up developing over time - you already have a tax base, adequate infrastructure and access to ridership in relatively densely populated mature neighbourhoods. As time goes on, and demand calls for it - if it calls for it - you have an entire Pembina corridor that's almost exclusively zoned C2 already that would very easily accommodate mixed-use multi-family development on a conditional use basis.

And I know what your argument will be - developers are doing it so there must be a reason. The reason is that developers aren't unlike humans anywhere else. In fact, in Winnipeg, as far as oracles of the market go, Winnipeg's developers are mostly pretty unsophisticated. They've been working on these projects for years. They're as prone to the sunk cost fallacy as anybody. But they also see that they're not the only ones in line to pay the freight, so they can stand there a little longer than the average guy...

[Simplicity]

Originally Posted by trueviking

we were discussing the relative cost of a public building...you can build for $3psf if you use cardboard...i stand by the fact that what we were discussing was very good value for money....it appears well beyond lowest common denominator development....that was the point of the discussion, not how absolutely cheaply can one build.

This needs to be addressed as part of the same argument as above. People aren't building at $115/sq ft because they're taking the moral low-ground. They're building at $115/sq ft because they're private investors looking for returns and that's about where you need to be in order to achieve the sort of (very poor), market rate return on investment that's available in the province, which is about 5.5%. Of course, it's actually lower than that when you account for your cost of capital, but I won't get into that here.

We aren't talking about projects like that new one on Sherbrook that want to pat themselves on the back for destroying at least half of the value of the money they've been given, we're talking about efficient projects.

[Winnipeg Architect]

Originally Posted by Simplicity

This needs to be addressed as part of the same argument as above. People aren't building at $115/sq ft because they're taking the moral low-ground. They're building at $115/sq ft because they're private investors looking for returns and that's about where you need to be in order to achieve the sort of (very poor), market rate return on investment that's available in the province, which is about 5.5%. Of course, it's actually lower than that when you account for your cost of capital, but I won't get into that here.

We aren't talking about projects like that new one on Sherbrook that want to pat themselves on the back for destroying at least half of the value of the money they've been given, we're talking about efficient projects.

If a developer cannot control the costs below $150 per square foot plus land and appliances with a mortgage, they will lose money. Condo or rental, all the same. Even with the grants available, it is tough.

BTW: You do not have to build crap for $115 per square foot.

Most architects are so clued out of reality it is funny as they usually never build anything. Whatever, most architects I know are broke and do not know how to run a business. I have been in this industry for almost 30 years and I have known every architect personally. MMP are the nicest guys around and actually listen. Attitudes left in the garbage can.

The old school guys are a joke and think they are god. I just watch them age and get grumpier and angrier every year. Boyle Schaeffer was kind of a cool old dude. Marshall Haid was OK too.

Just remember that BIOS went the way of the Arkadash.

A lesson for all you kids.

I rest my case.

[yellowghost]

So what are you saying? We should start shaking down companies like Wall-mart to help pay for the infrastructure needed to get customers into it's stores? You know companies like that would only just threaten to scrap plans for new stores or close existing ones...yep. its a win-win.

[Rudiger]

It appears they're now starting to cut down old growth elms on the riverbank at the D Condo site.

[steveosnyder]

Originally Posted by Rudiger

It appears they're now starting to cut down old growth elms on the riverbank at the D Condo site.

I'm going to have to walk by there today at lunch...

[trueviking]

Originally Posted by steveosnyder

I just wanted to add something to this mentality, and again let me preface that I want Rapid Transit as much as anyone here.

Doing the Parker Dogleg makes an already rich person richer by helping him (them) with their development potential for their large swaths of land. Doing the Letillier line helps a lot of private individuals get a little more wealthy. They have already taken on the risk of building, we should build infrastructure to service them.

I can't even begin to estimate the number of parcels along Pembina, but if all those people see a real increase in value of their properties as a result of RT I think that would be better than one (or maybe a few) person bearing the fruit of the RT potential.

I understand your point....I don't really care who gets rich, I care what is the best for the city as a whole.....if you look at how rapid transit benefits areas, it is concentrated around stations. By my count there would have been three station on the length of Pembina where the dogleg exists.

it is not uncommon to locate these nodes in greenfield sites as they provide the most opportunity for large scale TOD development....Pembina is fully developed, the land around each station would certainly rise in value but it would not have the same large scale impact....its not a streetcar system....we could hope that the land values increased enough to affect redevelopment in a piecemeal fashion, that would one day result in the density, but that isn't the only way.

I'm not justifying the way the city is doing this...it is reprehensible, but when I study TOD development in other cities, its highest impact comes from areas where new neighbourhoods can be built around the nodes to support the transit use...its a symbiotic relationship that adds riders to the line and the line adds value to the development.

There's a clusterfuck coming that will blow all of this out of the water, but in principle I do not mind targeting some greenfield development with rapid transit investment...its not unique to do that....many of the most successful TOD does it....it a good balance...I just wish the developments being designed were actual TOD, not car dominated transit adjacent development.

[trueviking]

Originally Posted by Simplicity

This needs to be addressed as part of the same argument as above. People aren't building at $115/sq ft because they're taking the moral low-ground. They're building at $115/sq ft because they're private investors looking for returns and that's about where you need to be in order to achieve the sort of (very poor), market rate return on investment that's available in the province, which is about 5.5%. Of course, it's actually lower than that when you account for your cost of capital, but I won't get into that here.

We aren't talking about projects like that new one on Sherbrook that want to pat themselves on the back for destroying at least half of the value of the money they've been given, we're talking about efficient projects.

the discussion was about the elevated quality specific 546 projects brought for their construction cost....it was not a discussion about how low cost one can possibly build. You maintained that Welcome Place was not an inexpensive building for what they got...I believe it is, when I compare it to other low cost buildings.